Brenda Erdman began working full time for Nationwide Insurance Co. in 1980. In 1998, she asked to work reduced hours in order to care for her daughter, who was born with Down Syndrome. As a part-time employee, she accrued unofficial “comp time,” working overtime outside the office in exchange for extra vacation time. She was known as an efficient, productive worker.

But in 2003, Erdman’s supervisor informed her that the part-time position would be eliminated, and that she would have to take a full-time job again. Erdman took the new position, but the company claims she became angry, erratic and insubordinate. The company also said she could no longer take off the month of August, during which she normally prepared her daughter for school, even though the vacation time had already been approved.

In April 2003, Erdman announced she would file for leave under the Family and Medical Leave Act (FMLA) instead of taking vacation time, and a human resources employee told her that the application wouldn’t be a problem. Less than a month later–before the leave was officially approved–Nationwide fired Erdman. The company said she was fired for behavioral problems, culminating in a profane personal phone call.

Erdman sued, claiming FMLA retaliation and Americans with Disabilities Act violations. The Pennsylvania district court granted Nationwide summary judgment on both claims, but on Sept. 23 the 3rd Circuit reversed on the retaliation claim. On Oct. 12, Nationwide’s attorneys filed a request for a rehearing.

In its decision in Erdman v. Nationwide Insurance Co., the appeals court rejected Nationwide’s argument that Erdman could not claim retaliation for taking FMLA leave because she never actually took the leave.

“We interpret the requirement that an employee ‘take’ FMLA leave to connote invocation of FMLA rights, not actual commencement of leave,” Judge Thomas Hardiman wrote for the unanimous 3rd Circuit panel.

“Employers cannot expect to evade liability under the FMLA by cutting off somebody who has requested a leave, regardless of whether the employee takes the leave,” says Reggie Belcher, a shareholder at Turner Padget Graham & Laney.

Leave Liability

The appeals court also rejected the company’s contention that it had no constructive notice that Erdman had worked the 1,250 hours in the previous 12 months necessary to qualify for FMLA leave because the hours included some worked from home. Nationwide claimed she had not clocked enough time, but the plaintiff presented her own documentation showing herself above the threshold. The court said a jury should decide if the company knew she had worked all those hours.

“Because [Nationwide] didn’t force her to submit an accurate record of her hours worked, they let that become a disputed fact in the litigation,” Reed Smith Partner Michael Jones says.

The decision underscores the importance of tracking work hours, particularly when employees work at home, have a flex- or part-time schedule or use BlackBerrys away from the office, Jones says.

The case also emphasizes the need to clarify expectations when an employee’s supervisor changes. Erdman’s old supervisor had told her in early 2002 not to work extra hours. But when the old boss left later that year, the new supervisor apparently never discussed her flex-schedule and practice of working extra hours for comp time. In September 2002, Erdman e-mailed her new supervisor, asking if she could still work additional hours in exchange for comp time, but the supervisor did not respond. This contributed to the conflicting version of hours worked.

“The employer was charged with constructive knowledge that the employee was working from home even though the supervisor had changed,” Jones says. “[This happened] because the company had left prior working arrangements in place and hadn’t clarified what the expectations were regarding her hours and recordkeeping of those hours.”

He adds that the Erdman court did not say whether an ineligible employee could claim retaliation, even if leave had not been officially denied yet. But he says most likely an employer would not face liability with an ineligible employee (see “Eligibility Ambiguity”).

Recordkeeping Reminder

Erdman reminds in-house counsel about the need for good recordkeeping, not only in terms of hours but also with other work-related issues.

Eric Beane, a partner at DLA Piper, says he’s seen employees apply for federally protected medical leave when they sense they might be fired for pre-existing work issues.

“[Requesting FMLA leave when an employee fears being fired] is a pretty common tactic, [and] that sort of thing has been popping up more recently, unfortunately, in this economy,” he says.

If a poorly performing employee files for leave, it can make terminating him difficult, even for justifiable reasons, but detailed documentation of performance or attitude issues can help the employers’ case.

“Employers need to close the information loop,” says Patricia Ogden, a partner at Barnes & Thornburg. She emphasizes the importance of communication between those responsible for terminating an employee and those who monitor leave requests.

Belcher says a retaliation claim is an inherent risk from the moment an employee asks for leave. “If you take any adverse action against an employee from that point forward, you better have a legitimate nonretaliatory reason that you can document and support,” he says.